PRESS ADVISORY, Proyecto Gato/Les Amis de la Terre, February 10, 2005
French Utility Faces OECD Scrutiny For Laotian Dam Project
The French government has agreed to review a complaint againstElectricité de France for allegedly violating OECD guidelines inplanning a billion-dollar hydro venture in Laos.
Electricité de France is the lead shareholder in Laos' Nam Theun 2 damproject, which, if completed, would flood almost 500 square kilometres of land and displace thousands of poor Laotian farmers.
The complaint by citizens groups accuses the French utility of failingto respect OECD guidelines for multinationals, particularly ondisclosure and environmental assessment.
"EdF does not appear to take its social and environmentalresponsibilities seriously," says Jan Cappelle, a scientist with one ofthe complainants, Proyecto Gato of Belgium. Mr. Cappelle and othersvisited the Nam Theun 2 project area last year.
A source at the French finance ministry said the review would becompleted before the World Bank's decision on financing, which isexpected no later than May 2005.
"This review is important for French taxpayers but also for Laotians whohave no legal mechanisms for holding Electricité de France accountablein their own country," says Sebastien Godinot of the French group, Amisde la Terre, also a complainant. "The evidence suggests EdF has beenless than honest with Laotians about the true impacts its dam would haveon their environment and rural livelihoods."
Under OECD guidelines, the French utility is required to provideLaotians with detailed information on the project's environmentalimpacts, and engage in "adequate and timely communication andconsultation" with affected communities.
But the complainants argue that EdF has:
- exaggerated its project's benefits while downplaying risks;
- failed to adequately assess and disclose the dam's impacts and
costs; and
- failed to adequately respond to affected communities' concerns.
To promote compliance with the OECD guidelines, each OECD country haswhat's known as a "National Contact Point." The French National ContactPoint is hosted by the Ministry of Finance but includes other ministriesand trade unions as NCP members.
Once the NCP accepts a complaint for review, it can invite expertcomments, and facilitate dialogue between the company and concernedparties, before making final recommendations.
This is not the first time EdF has faced criticism about itsinternational activities. In 2003, the utility was forced to pull out ofthe Nam Theun 2 deal temporarily while under fire from the Frenchparliament for its high-risk expansion plans outside France.
EdF has until this May to secure financing for the Laotian venture,according to the power purchase deal it signed with the ElectricityGenerating Authority of Thailand in 2003.
The project's fate hinges upon World Bank support, without which EdFwill have difficulty attracting other lenders, including the AsianDevelopment Bank, the French export credit agency, COFACE, and theEuropean Investment Bank.
Nam Theun 2 is a Build-Own-Transfer project under development by the NamTheun 2 Power Company, which includes EdF (35 percent), ElectricityGenerating Company of Thailand (25 percent), Ital-Thai DevelopmentPublic Company (15 percent), and Laos' national utility, Electricite duLaos (25 percent).
CONTACT:
Jan Cappelle, Proyecto Gato, Belgium 0032 484 403358
OR
Sebastien Godinot, Amis de la Terre 0033 1 48 51 18 92
Notes
The full complaint submitted by citizens groups last November isavailable at Proyecto Gato's web site at at
Information about the French government's National Contact Point onthe OECD Guidelines for Multinational Enterprises is available at
The OECD Guidelines for Multinational Enterprises are available at Dozens of complaints against multinational enterpriseshave been filed since the OECD guidelines were established in 2000,mostly concerned with labour relations and corruption. Only one case has
led to divestment: a Dutch tourism agency pulled out of Burma.